Gross Negative Fair Value - GNFV

AAA

DEFINITION of 'Gross Negative Fair Value - GNFV'

An assessment of the total fair value of a financial institution's (FI) contracts in which the FI currently has a balance outstanding to the counterparty. In order for the gross negative fair value to represent the maximum amount that would be lost by all counterparties if the FI becomes insolvent, it is assumed that contracts are not netted and that the other party does not have claims on the FI's assets.

INVESTOPEDIA EXPLAINS 'Gross Negative Fair Value - GNFV'

Along with gross positive fair value, this value can serve as an estimate to the FI's credit-derivative exposure. Carefully keeping track of these figures can contribute to controlling the FI's exposure to derivatives, because solvency issues can quickly emerge in situations where the market turns against the derivative positions held by the FI.

RELATED TERMS
  1. Fair Value

    1. The estimated value of all assets and liabilities of an acquired ...
  2. Derivative

    A security whose price is dependent upon or derived from one ...
  3. Default Risk

    The event in which companies or individuals will be unable to ...
  4. Insolvency

    When an individual or organization can no longer meet its financial ...
  5. Credit Derivative

    Privately held negotiable bilateral contracts that allow users ...
  6. Warren Buffett

    Known as "the Oracle of Omaha", Buffett is Chairman of Berkshire ...
RELATED FAQS
  1. What happens to the stock of a public company that goes bankrupt?

    Occasionally, publicly listed companies go bankrupt. The company's shareholders, depending on the type of stock they hold, ... Read Full Answer >>
  2. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  3. What is the formula for calculating the capital asset pricing model (CAPM) in Excel?

    The capital asset pricing model (CAPM) measures the amount of an asset's expected return given the risk-free rate, the beta ... Read Full Answer >>
  4. What is the formula for calculating return on investment (ROI) in Excel?

    Return on investment (ROI) measures the performance of an investment by measuring the gain from an investment and the cost ... Read Full Answer >>
  5. Is it better to buy A-shares or a no-load mutual fund?

    Mutual funds and other pooled investments are popular among investors because they provide a level of diversity and professional ... Read Full Answer >>
  6. What is the smallest amount of shares I can buy?

    There is no minimum amount of shares that need to be bought in a single transaction, so an investor can purchase as little ... Read Full Answer >>
Related Articles
  1. Investing Basics

    The Barnyard Basics Of Derivatives

    This tale of a fictional chicken farm is a great way to learn how derivatives work in the market.
  2. Mutual Funds & ETFs

    The Alphabet Soup Of Credit Derivative Indexes

    Find out how these instruments work and how they are used in the market.
  3. Options & Futures

    Haunting Wall Street: The Halloween Terminology Of Investing

    Beware of zombies and Jekyll and Hyde companies! Read about the spooky terms circulating Wall Street.
  4. Options & Futures

    Dividends, Interest Rates And Their Effect On Stock Options

    Learn how analyzing these variables are crucial to knowing when to exercise early.
  5. Insurance

    Basel II Accord To Guard Against Financial Shocks

    Problems with the original accord became evident during the subprime crisis in 2007.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Emerging Markets

    Learn more about the most liquid and highly traded emerging market ETF in the world -- the iShares MSCI Emerging Markets ETF (EEM).
  7. Stock Analysis

    The Best Buy-and-Hold Stocks for Your Retirement Portfolio

    These stocks offer stability while exhibiting strong indicators of future growth.
  8. Investing Basics

    Explaining Value Stock

    Investors look for value stocks because they consider them to be underpriced based on the stock’s fundamentals.
  9. Stock Analysis

    The 3 Best Buy-and-Hold Stocks For the Next 10 Years

    Find out what makes electric cars, burritos and muscle shirts great buy-and-hold additions to your long-term portfolio.
  10. Stock Analysis

    Long-Term Outlook For Duke Energy

    Learn why Duke Energy is showing both positive and negative signs for long-term investors, and understand how an interest rate increase may impact the company.

You May Also Like

Hot Definitions
  1. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  2. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  3. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  4. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  5. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  6. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!